Indian IT industry sweats after Donald Trump elected next President

November 10, 2016 — INDOLINK Consulting (es)

Source: Financial Express, Nov 10, 2016

The $150-billion Indian IT industry, already faced with the headwind of slowing growth, may face further uncertainty with the election of Republican candidate Donald Trump as the new president of the US, the country which accounts for around 60% of India’s software exports.

Trump, during his campaign, had repeatedly spoken against IT outsourcing and immigration, even mentioning Indian companies such as Tata Consultancy Services (TCS) and HCL Technologies.

Arup Roy, research director, Gartner, said, “Now with Donald Trump, administration will add to the industry’s woes. The Trump administration’s protectionist views would have further dampening impact on growth prospects, if the views were to crystalise into some serious policy implementations.”

Industry executives, on condition of anonymity, told FE that there could be a delay in the decision-making process in the US market as they await the policy tenor of the forthcomin.Trump administration. “Traditionally, we have seen Republicans more supportive of Indian IT when compared to Democrats,” an executive said, providing a counter view.

The Indian IT industry’s trade body, Nasscom, in a statement said that Trump’s observations regarding outsourcing and high-skilled immigration “were based on fabrications put out by critics of the sector.” Nasscom said that it would be keen to engage with the Trump administration. “Our sector plays a key role in helping US businesses innovate and grow and make corporate America more competitive.”

V Balakrishnan, former board member of Infosys, told FE that there could a knee-jerk reaction from the US administration in terms of increase in visa fees or minimum wages but expects economic realities to take over. “America has shortage of skilled workforce and India is one of those countries which can fill the gaps,” he added.

The Indian IT industry has been faced with an anti-outsourcing backlash in the US, which include facing certain class action suits and rules that have increased their cost of operations.

The Indian IT companies have constantly spoken about the kind of investments it has made in the US, which includes setting up local development centres.